RBC, one of Russia’s leading business media outlets, reports that stricter conditions have been introduced for obtaining approvals from the Government Commission for Control over Foreign Investments (the “Commission”) in relation to transactions involving the exit of foreign businesses from so-called “unfriendly” jurisdictions.
For the past two years, the Commission’s approval has been contingent upon two key conditions:
- a “voluntary” contribution to the Russian budget (commonly referred to as an “Exit Tax”), and
- the sale price of the asset being below its market value.
RBC has reported further tightening of these rules. The key changes include:
- The required contribution has increased to 35% of the asset’s market value (up from 15%), payable in installments:
- 25% within the first month after the transaction,
- 5% within the first year,
- the remaining 5% within two years.
- The discount on sale price must now be at least 60% (previously 50%), meaning the asset can be sold for no more than 40% of its market value.
- Transactions exceeding 50 billion rubles (approx. 50 million euros) now require the approval of the President of Russia.
According to RBC, and confirmed by the Ministry of Finance, these new conditions will apply not only to new applications but also to those that have already been submitted and pending approval.
We are closely monitoring the situation and will provide updates following the official publication of the Commission’s decision confirming and formalising these changes.